DISSECTING REITS ACQUISITIONS IN JAPAN AND SINGAPORE: LIKELIHOOD AND SIZE

Abstract

This thesis examines the determinants of growth strategy for the Real Estate Investment Trusts (REITs) market in Singapore and Japan. Covering 64 REITs over 14 years, I find that the growth path of REITs is highly related to firm size. S- and JREITs make their acquisition decisions differently about firm size. The negative relationship between likelihood of acquisition and size for is consistent to Evans (1987)' research that the growth rate of firms decreases with firm size. Acquisition size for both markets are negative to firm size, implying that small REITs adopt more aggressive strategies to generate higher returns to attract investors (Mclntosh et al., 1991). On the asset financing structure side, I find that availabilities in internal capital (retained earnings) and external capital (seasoned equity offering and debt) lead to positive likelihood of acquisition with only SEO is the influential source to fund large acquisition assets.